Innovative Industrial Properties has closed on the acquisition of a property in southern California, which comprises approximately 70,000 square feet of industrial space.
The purchase price for the property was $17.5 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease at the property with Kings Garden Inc., for continued operation as a licensed cannabis cultivation, manufacturing and distribution facility. Including this property, IIP leases five properties to Kings Garden, which includes the four-property industrial portfolio comprising an aggregate of approximately 102,000 square feet that IIP acquired in April of last year in southern California.
"Kings Garden has truly differentiated itself in the California market over the past five-plus years by its dedication to developing the highest quality cannabis products, which has translated to its consistent strong growth and success throughout that time,"
Paul Smithers, President and Chief Executive Officer of IIP said.
"We are thrilled to expand our long-term real estate partnership with a proven operator dedicated to excellence in product quality and operations."
"Kings Garden is licensed for cannabis cultivation, nursery, manufacturing, processing, delivery and distribution. With its advanced growing techniques, state-of-the-art facilities and research and development for the creation of new proprietary genetics, Kings Garden has developed a distinguishing brand in the southern California market, including botanicals, concentrates and accessories. Kings Garden has over 200 employees, and has raised approximately $55 million in capital since inception."
Similar to other states during this coronavirus health crisis, California authorities ordered all businesses that are not offering essential services to close operations for a period of time. However, regulated cannabis operators are permitted to continue selling both adult-use and medical-use cannabis products, and have been categorized as essential. Despite stay-at-home restrictions, according to Marijuana Business Daily, regulated adult-use cannabis sales in California were approximately $248 million for April, representing a 17% increase from one year ago. Also according to Marijuana Business Daily, while only 180 of California’s 482 municipalities and 29 of its 58 counties allow for regulated cannabis companies to operate within their borders, the current coronavirus pandemic and associated severe economic disruption are causing localities to reevaluate their positions on banning cannabis operations, in consideration of much-needed job creation and tax revenue.
For more information:
Innovative Industrial Properties
11440 West Bernardo Court, STE 220
San Diego, CA 92127